Barclaycard - is their formal repayment plan a good idea?

swampduck

I recently got on to Barclaycard as I had checked my credit file and had been on AR for years. Reading other MSE posters experiences made me realise that it was actually more detrimental to be in this arrangement as I would have it show on my credit files for an additional six years after settling the debt. As it happened Barclaycard had defaulted me but not entered it with Experian etc so following a phone call last weekend they were going to amend my records and give me £50 too for their mistake!! I've had the compensation so now just need to wait a month before I can check I they have actually amended everything. This means this default will drop off next year even though I'll still be paying for a while.

My husband had an AR with MBNA but they changed this to updating with an green up to date marker 16 months ago so we can live with that until we pay off in full as each month an AR marker drops off. We found that of all our creditors MBNA were actually among the best in setting up an AR and have never bothered us for increasing payments and send a monthly statement too unlike many DCAs who hound you morning, noon and night!!

If you have been maintaining regular payments with MBNA it might be worth asking them to change the markers! Nothing to be lost in having a go.

Swampy

Killick

I'm not sure if I get this but are you (National Debtline) advocating not paying creditors in order to get a "beneficial" default?
I may be misinterpreting what is being said here but I've just spent nearly two years on an arranged payment of my debts through Stepchange, feeling I was doing the right thing and now the advice on here seems to be not to pay anything in order to get a better deal.
Please forgive me if I seem flabbergasted but I think I'm on a banana boat to ignorance here......Is there something I have missed?

swampduck

No I would say that if it will take you six years or more to clear a debt - then morally you should that pay that debt. It's just if you have been defaulted then after six years the default drops from your files - there may still be a debt after six years but you won't be penalised because you were paying it compared to someone who paid nothing at all.
If you have AR markers then they still show for six years even after have cleared the debt!! More punishment for doing the right thing!! That isn't fair!! AR markers were intended to be a short term solution - for perhaps six months - changing it to a default when you know your file is going to be trashed for six years or more seems to me to be the wiser option. At least after six years your file will be clear of all unfavourable history.

Swampy

sourcrates

Killick wrote: »

I'm not sure if I get this but are you (National Debtline) advocating not paying creditors in order to get a "beneficial" default?
I may be misinterpreting what is being said here but I've just spent nearly two years on an arranged payment of my debts through Stepchange, feeling I was doing the right thing and now the advice on here seems to be not to pay anything in order to get a better deal.
Please forgive me if I seem flabbergasted but I think I'm on a banana boat to ignorance here......Is there something I have missed?

Some times when your in the OP`s position you need to work the system to your benefit.
An "AP" marker can lead to credit problems way down the line, once a default is registered, then you know, more or less for sure, that it will be gone 6 years from the date it was registered, creditors own payment arrangements are not always your best bet, as they mark your file "AP", were as once an account goes to collections or a DCA a default is usually registered, so starting the 6 year clock.


DCA`s are also more amenable to payment arrangements than original creditors are, so in the long run, its better to deal with collections/DCA than to continue an "AP" with the original creditor.

GettingOrganised

swampduck wrote: »

My husband had an AR with MBNA but they changed this to updating with an green up to date marker 16 months ago so we can live with that until we pay off in full as each month an AR marker drops off. We found that of all our creditors MBNA were actually among the best in setting up an AR and have never bothered us for increasing payments and send a monthly statement too unlike many DCAs who hound you morning, noon and night!!

If you have been maintaining regular payments with MBNA it might be worth asking them to change the markers! Nothing to be lost in having a go.

Swampy

Hi Swampy, thanks for sharing your experience with MBNA. I recall receiving letters for each account advising that they would be bringing my account up to date as a goodwill gesture. I'll dig them out and check the dates on them, it sounds similar to yours. Maybe I just need to wait for my credit report to be updated with this information? I think I'll gather all my paperwork up and give them a call, like you say it can't do any harm.

GettingOrganised

Killick wrote: »

I'm not sure if I get this but are you (National Debtline) advocating not paying creditors in order to get a "beneficial" default?
I may be misinterpreting what is being said here but I've just spent nearly two years on an arranged payment of my debts through Stepchange, feeling I was doing the right thing and now the advice on here seems to be not to pay anything in order to get a better deal.
Please forgive me if I seem flabbergasted but I think I'm on a banana boat to ignorance here......Is there something I have missed?

Hi Killick, there is no question about paying the debt owed back, it is just a matter of credit file damage limitation. I find it completely crazy that having a formal repayment plan with the original lender whilst they are still charging interest can be more detrimental to my credit score (as the AR will be on my credit file for 6 years after I complete payment, so trashing my credit file for up to 11 years.) However, if I default (which will probably end up with the debt getting sold to a DCA) the default will remain on my file for 6 years from default date.

I have absolutely no plans for getting any further credit in the mid term and understood that last year when I started contacting creditors my credit file would be worthless for the next few years. However, I think paying this price for 11 years is very harsh. Especially, if I defaulted and didn't pay a penny, my file would be clean again in the 6 years.

National_Debtline

Killick wrote: »

I'm not sure if I get this but are you (National Debtline) advocating not paying creditors in order to get a "beneficial" default?
I may be misinterpreting what is being said here but I've just spent nearly two years on an arranged payment of my debts through Stepchange, feeling I was doing the right thing and now the advice on here seems to be not to pay anything in order to get a better deal.
Please forgive me if I seem flabbergasted but I think I'm on a banana boat to ignorance here......Is there something I have missed?

I wouldn't suggest avoidance would be a practical way of dealing with debts - as often it can lead to further action. I do, however, hope that a company would register a default on a credit file rather than apply an arrangement-to-pay marker - as this could scupper someone's credit file for potentially a long time. That said, if someone is having a temporary 'blip' that individual may prefer to have an arrangement-to-pay marker instead - so I can understand the logic. There is certainly no one size fits all solution when it comes to debts but I would hope that a credit file accurately is accurately representative.

I hope that makes sense,

David.